Styrolution's Ludwigshafen ABS, SAN not fully back up until 2012

08 November 2011 17:04[Source: ICIS news]

(Recasts, clarifying headline and first three paragraphs)

LONDON (ICIS)--Styrolution's Ludwigshafen, Germany plant will not be fully back on line until next year following the force majeure declared on certain acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN) grades last month after a fire, a company source said on Tuesday.

The plant went off line on 23 October after the fire caused severe damage to the cable infrastructure that is critical to the operation of the entire facility.

Force majeure will remain in place while a probe into the cause is undertaken and repairs are carried out at the site. Until then, ABS and SAN grades such as Luran and Luran HH will be in short supply.

One trader said it has received numerous extra enquiries as customers try to get in December orders early to avoid being caught short.

Buyers argued that commodity grades are not too badly affected by the force majeure, in light of the soft market. Precarious macroeconomic conditions and the winding down of inventories at the end of the year dampened buying interest, sources said.

However, consumers of speciality and high-heat products are struggling more because demand for these grades – particularly from the downstream automotive sector – remains healthy.

The Styrolution source said it will pass on any cost decreases to consumers this month, which will amount to around minus €30/tonne ($41/tonne) for SAN, following the €23–25/tonne fall in upstream styrene.

Other suppliers said they will try to maintain rollovers on SAN, given the tightened supply situation, although some small decreases may be negotiated.

However, buyers are looking for a complete follow-through, in cost reduction at least.

Styrenics company Styrolution is a joint venture between German chemical major BASF and Swiss chemicals group INEOS. Its headquarters are in ?xml:namespace>Germany.

SAN compounding prices for October were pegged at €1,880–1,890/tonne FD (free delivered) NWE (northwest Europe).